SALT LAKE CITY — A 1,000-room convention hotel partially subsidized by tax rebates creates an unfair market advantage, a representative of Grand America and Little America hotels told the Salt Lake County Council Tuesday.
"The primary beneficiary will be convention hotel," said Clint Ensign, senior vice president of government relations for the Sinclair Companies.
"This is a model that essentially disenfranchises existing hotels."
Ensign and M. Royce Van Tassell, vice president of the Utah Taxpayers Association, met with the Salt Lake County Council to present findings of a study commissioned by the association that concludes that the "subsidized hotel" would take $105 million in business from existing taxpaying hotels its first five years.
"We're not opposed to a convention hotel if they come into the market the same way other hotels have come into downtown," Ensign said, noting the hundreds of millions of private investment dollars prior to the 2002 Winter Games.
Under a proposal among Salt Lake County, Salt Lake City and the state, private investors would build a 1,000-room convention hotel, which would include 80,000 to 100,000 square feet of public meeting space. Hotel investors would be repaid for fronting the cost of the county-controlled meeting space through sales and property tax rebates paid over 20 years. The financing arrangement requires the approval of the Utah Legislature. A similar proposal was passed by the Utah Senate in 2013 but failed by four votes in the House.
Salt Lake County Mayor Ben McAdams said Sen. Stuart Adams, R-Layton, and Rep. Brad Wilson, R-Kaysville, will carry the legislation again this year.
Councilman Randy Horiuchi said the development of a convention hotel would help ensure the county gleans maximum benefit from taxpayers' investment in the Salt Palace Convention Center and Southtowne Exposition Center. Absent a convention hotel, "it leaves us completely defenseless" in bidding for certain business, he said.
"In order for us to compete, even get your toe in the door, you have to have this kind of facility," Horiuchi said.
But others, such as Councilman Richard Snelgrove, said the tax rebates not only would undermine other hotels in the city, but "these compete against our own Salt Palace and Expo Center the way I see it."
"If this is such a good idea, a developer will jump in and fill the void," Snelgrove said.
Snelgrove said the County Council and taxpayers need more information about the full cost of the tax increment package.
"The devil’s in the details and there’s a lot of details lacking," he said.
McAdams said under no circumstances would he support a government-funded, government-operated hotel. He said the county's support of a convention is akin to government constructing airports.
"While government isn’t involved in tourism, we do build airports," McAdams said. "We're proposing to extend a runway so we can accommodate larger jets."
If Salt Lake City were able to attract "even a fraction of the convention business we missed out on" after the construction of a convention hotel, "we will have a positive impact on our community," he said.
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